IN THE NEWS ~ Enbridge bungled handling of Michigan crude spill, U.S. agency says in scathing report

Published | Publié: 2012-07-10
Received | Reçu: 2012-07-10 7:05 PM
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Enbridge handled Michigan crude spill like 'Keystone Kops,' says U.S. regulator

Peter O'Neil

Duplicates: EDMONTONJOURNAL.COM, 2012/07/10

   OTTAWA --- The head of a U.S. independent watchdog has urged Canadian authorities to make sure Calgary-based Enbridge Inc., found culpable Tuesday in a "tragic and needless" 2010 spill in Michigan, has finally learned its lesson before letting it construct the proposed $5.5 billion Northern Gateway oilsands pipeline to the B.C. coast.

   National Transportation Safety Board Chairman Debbie Hersman made the comment after outlining how Enbridge officials, during and after a disastrous 2010 pipeline rupture in Michigan, acted like the "Keystone Cops" in the face of the most costly onshore oilspill in American history.

   The scathing NTSB report said more than 840,000 gallons of heavy bitumen crude oil from Alberta spilled in the Michigan wetlands, a local creek and the Kalamazoo River, resulting in more than $800 million in damages.

   That pricetag is more than five times worse than the previous record even though other spills have involved higher volumes, according to Hersman.

   The spill affected the health of 320 people and nearly 4,000 animals, while permanently displacing some residents in the Kalamazoo River area. The cleanup continues.

   Hersman said Enbridge mishandled what could have been a relatively minor spill due to "pervasive systemic problems" within the company as well as poor U.S. regulatory oversight.

   "This accident was the result of multiple mistakes and missteps made by Enbridge," she said.

   "But there is also regulatory culpability. Delegating too much authority to the regulated to assess their own system risks and correct them is tantamount to the fox guarding the henhouse. Regulators need regulations and practices with teeth -- and the resources to enable them to take corrective action before a spill, not just after."

   Hersman also said the company clearly failed to learn its lessons from major U.S. spills in 1991 and 2002 in the U.S., and in 2007 in Canada, since many of the mistakes from those spills were repeated in 2010.

   Hersman was asked by The Vancouver Sun during a news conference how she views Enbridge's plans to build two 1,177-kilometre pipelines from the Alberta oilsands region through the Rockies to the B.C. coast. A joint National Energy Board-Canadian Environmental Assessment Agency panel is currently assessing the project, though Prime Minister Stephen Harper's government has recently given itself the authority to be the final arbiter on decisions by the quasi-independent NEB.

   "It will be very important for anybody who is providing approvals to new operations to make sure they have the appropriate safety systems in place, and that the regulator has the tools that they need to do the appropriate oversight," she replied.

   Hersman sounded flabbergasted as she described Tuesday how Enbridge officials at the Edmonton pipeline control centre failed for more than 17 hours to realize that alarms and total pressure loss were clear indications of a massive spill caused by a pipeline fracture.

   "When we were examining Enbridge's poor handling to their response to this rupture you can't help but think about the Keystone Cops," Hersman said, referring to the fictional incompetent policemen in silent film comedies of the early 20th century.

   "Why didn't they recognize what was happening and what took so long?"

   During and after the spill police cars and fire engines in Marshall, Michigan, were passing each other as emergency responders tried to figure out what was going on.

   Meanwhile, Enbridge ineffectively tried to deal with the impact of the massive release of heavy bitumen crude from the Alberta oilsands.

   "It was like Fatty Arbuckle and the gang, where everyone's running around running into each other," Hersman said, referring to Roscoe "Fatty" Arbuckle, the rotund star of the zany Keystone Cops comedies.

   Enbridge Chief Executive Officer Pat Daniel, who was in the NTSB's Washington, D.C. conference room to observe the meeting, issued a statement that didn't acknowledge company wrongdoing.

   "We believe that the experienced personnel involved in the decisions made at the time of the release were trying to do the right thing," Daniel said.

   "As with most such incidents, a series of unfortunate events and circumstances resulted in an outcome no one wanted."

   Another senior Enbridge official, Stephen Wuori, said that safety is at the "core" of company operations and that Enbridge intends to learn its lessons so that such an incident is never repeated.

   He said the company's internal investigation of the 2010 incident has already resulted in "numerous enhancements to their processes, procedures and training as a result of the findings of the investigation, including in the control centre. Incident prevention, detection and response have also been enhanced."

   A company official later confirmed that some employees were disciplined or terminated.

   Northern Gateway critics said Enbridge doesn't deserve another chance to learn its lesson before proceeding with the proposed 1,177 kilometre twin pipelines from the Edmonton area through the Rockies to Kitimat on the B.C. coast.

   B.C. New Democratic Party leader Adrian Dix said the NTSB's comments are particularly devastating for Enbridge given the company's recent advertising campaign that portrays the project as low-risk.

   "It will have a very profound effect on peoples' view of the Enbridge project," said Dix, who repeated his call on B.C. Premier Christy Clark to finally take a position on whether she favours or opposes Enbridge's plans.

   B.C. Conservative leader John Cummins said he supports the Northern Gateway project, but added that if he were to be made premier his government would have to be convinced of the project's safety before moving ahead.

   "We support the project, we support the concept and we're prepared to work with Enbridge to make sure the pipeline meets the safety concerns of British Columbians and that British Columbians are totally protected in the event that there is an oil spill," he said.

   "We're not going to give a pass on something just to move ahead with a project. We have to be sure that we're going to be able to protect the environment and if there is an issues that it can be dealt with quickly," he added.

   "It won't go through until we're fully satisfied that those best interests are addressed."

   Peter Julian, the federal NDP's natural resources critic, said the NTSB's call for tougher regulatory oversight of pipelines in the U.S. coincides with the Harper government's relaxation of environmental rules in order to encourage pipeline projects and other natural resource developments.

   "This is a real wakeup call for Canadians and especially British Columbians," Julian said.

   "We're facing a situation where Bill C-38 is actually reducing regulatory oversight even prior to the construction of any new pipelines. We have a situation which is exactly what (NTSB chairman Debbie Hersman) describes as the 'fox guarding the henhouse.'"

   He said an accident along the lines of the Michigan disaster would devastate the B.C. tourism and fisheries sectors.

   Environmental groups also said the report sends a strong signal to Canadians.

   "Today, we heard the truth about the 'Keystone cop' company that Prime Minister Harper wants to build a tarsands pipeline through the largest intact temperate rainforest left on the planet," said Greenpeace Canada's Mike Hudema.

   "The federal budget bill gutted our environmental laws to pave the way for Enbridge's proposed new tar sands pipeline through B.C., on the grounds that companies don't need government oversight. Yet Kalamazoo is what you get when we trust oil companies to police themselves."

   The Calgary-based Pembina Institute issued an analysis saying that the federal and Alberta governments have to take more steps to ensure pipeline safety.

   Patricia Best, spokeswoman for Natural Resources Minister Joe Oliver, noted that the recent budget included funding to sharply increase inspections, audits and fines involving federally-regulated pipelines. She also noted that the Canadian and U.S. regulatory regimes are much different.

   Hersman, in her opening statement at Tuesday's board meeting, asked if the 2010 Enbridge spill, as well as a 2010 Pacific Gas & Electric pipeline explosion in California that killed eight people and left another 58 injured, raised questions about the entire industry.

   "In both cases we found problems with integrity management programs, control centres, public awareness programs, and emergency response," she said.

   "While our findings raise red flags about the safety of these two companies, they should also force us to ask hard questions of this vital industry.

   "With more than 2.5 million miles of pipeline running through this country - enough to circle the earth one hundred times - we have to ask, 'Are these companies representative of others?' If the answer is yes, we can expect to be back here again discussing the same issues with a different company. The only unknowns are when? Where? And, how much damage?"

   Her report was also scathing in its criticism of the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration (PHMSA), which earlier this month imposed a record $3.7 million US fine on Enbridge in connection with the spill.

   Hersman noted that the company failed to take action despite knowing since 2004 that the pipeline had corrosion problems, and since 2005 that there were cracks in the area of the 2010 rupture.

   The incident has fired up international opposition to both the Northern Gateway proposal and Calgary-based TransCanada Corp.'s Keystone XL project to the U.S. Gulf Coast, which has been delayed by U.S. President Barack Obama.

   Among other findings and NTSB comments:

   *The rupture had nothing to do with internal pipeline corrosion. That finding will not please environmental groups who have long argued that bitumen crude is more corrosive and therefore increases the risk of pipeline breaks.

   *The rupture was caused by a sharp rise in internal pressure during a regular shutdown that opened an area of the pipeline where there were "corrosion fatigue cracks" that built up under polyethylene tape that had become detached from the pipeline.

   *U.S. government rules didn't provide clear requirements on when to repair pipeline defects, while the PHMSA did not require the company to excavate and repair cracks in the Michigan pipeline first detected in 2005.

   *The NTSB criticized Enbridge's pipeline "integrity management program" as well as its poorly-trained Edmonton operations centre staff, who misinterpreted alarms during the spill so badly that they twice started up the pipeline flow. Those two startups caused 81 per cent of the total release.

   *While Enbridge had a rule following a major 1991 spill to shut down pipelines no later than 10 minutes after notification of an unexplained problem, a "culture" developed that led to this rule being ignored.

   *The company's public awareness program was deficient, according to the NTSB, though an official Tuesday noted that many communities and local fire departments throughout the U.S. are unaware that underground pipelines are in their midst.

   poneil@postmedia.com

   Twitter.com/poneilinottawa

   Read his blog, Letter from Ottawa, at edmontonjournal.com/oneil

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   with files from Jonathan Fowlie, Vancouver Sun

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